| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 4, 2021, Four Corners Property Trust, Inc. (the “Company”) and its subsidiary, Four Corners Operating Partnership, LP (the “Borrower”), entered into a Second Amended and Restated Revolving Credit and Term Loan Agreement (the “Loan Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent (the “Agent”), and the lenders (the “Lenders”) and other agents party thereto, which amends and restates in its entirety an existing Amended and Restated Revolving Credit and Term Loan Agreement dated as of October 2, 2017 by and among the Company, the Borrower, the Agent, the Lenders and the other agents party thereto.
The Loan Agreement provides for a revolving credit facility in an aggregate principal amount of $250.0 million and a term loan facility in an aggregate principal amount of $400.0 million, comprised of (i) a $150.0 million term credit facility with a maturity date of November 9, 2025 (the “Term Loan A-1 Facility”), (ii) a $100.0 million term credit facility with a maturity date of November 9, 2026 (the “Term Loan A-2 Facility”), (iii) a $50.0 million term credit facility with a maturity date of November 9, 2023 (the “Non-Extended Term Loan A-2 Facility”) and (iv) a $100.0 million term credit facility with a maturity date of March 9, 2024 (the “Non-Extended Term Loan A-3 Facility” and collectively with the Term Loan A-1 Facility, Term Loan A-2 Facility, and the Non-Extended Term Loan A-2 Facility, the “term loan facility” and each a “term loan”). The Loan Agreement has an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $350.0 million, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount.
Loans under the Loan Agreement accrue interest at a per annum rate equal to, at the Borrower’s election, either a LIBOR rate plus a margin of 0.725% to 1.400%, in the case of the revolving credit facility, 0.80% to 1.65%, in the case of the Term Loan A-1 Facility and Term Loan A-2 Facility, and 0.85% to 1.65%, in the case of the Non-Extended Term Loan A-2 Facility and Non-Extended Term Loan A-3 Facility, or a base rate determined according to a prime rate or federal funds rate plus a margin of 0.00% to 0.400%, in the case of the revolving credit facility, and 0.00% to 0.65%, in the case of the term loan facility. In each case, the margin is determined according to, at the Borrower’s election, either (1) the Company’s total leverage ratio in effect from time to time, or (2) at any time after the Company has received an investment grade rating from either Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services on its senior, unsecured, long-term indebtedness, the credit rating applicable from time to time with respect to such indebtedness. In the event that all or a portion of the principal amount of any loan borrowed pursuant to the Loan Agreement is not paid when due, interest will accrue at the rate that would otherwise be applicable thereto plus 2.00%. So long as the Company continues to determine pricing according to its total leverage ratio, a facility fee at a rate of 0.15% or 0.30%, per annum, depending on the Company’s total leverage ratio, applies to the total revolving commitments outstanding. After the Company elects to determine pricing based on the credit rating applicable to its senior, unsecured, long-term indebtedness, a facility fee at a rate of 0.125% to 0.30%, per annum, depending on the credit rating applicable from time to time with respect to such indebtedness, applies to the total revolving commitments outstanding. The LIBOR replacement provisions in the Credit Facility permit the use of rates based on the secured overnight financing rate (“SOFR”) administered by the Federal Reserve Bank of New York.
Amounts owing under the Loan Agreement may be prepaid at any time without premium or penalty, subject to customary breakage costs in the case of borrowings with respect to which a LIBOR rate election is in effect. The revolving credit facility matures on November 9, 2025, and the term loan facility matures as described above. No amortization payments are required on any term loan prior to its maturity date. The Borrower has the option to extend the maturity date of the revolving credit facility for up to one year, subject to the payment of an extension fee of 0.0625% on the aggregate amount of the then-outstanding revolving commitments for each six-month extension.
The obligations under the Loan Agreement are unsecured. Pursuant to a second amended and restated parent guaranty entered into on June 4, 2021, which amends and restates in its entirety an amended and restated parent guaranty dated October 2, 2017, the obligations under the Loan Agreement are guaranteed, on a joint and several basis, by the Company and its subsidiary, Four Corners GP, LLC (the “Guaranty”).
The Loan Agreement contains customary affirmative and negative covenants that, among other things, require customary reporting obligations, contain obligations to maintain REIT status, and restrict, subject to certain exceptions, incurrence of debt, incurrence of secured debt, the ability of the Borrower and the guarantors to enter
